by Craig Brightup, The Brightup Group
On July 31, President Trump announced new reciprocal tariffs on some 70 countries effective on August 7. The following list (Annex 1) is linked to the Executive Order:
The European Union and Vietnam
On July 28, President Trump announced a trade deal with the European Union, which agreed to purchase $750 billion in U.S. energy and make new investments of $600 billion in the U.S. by 2028. The EU also agreed to a U.S. tariff rate of 15% on most items, including autos, auto parts, pharmaceuticals, and semiconductors, but tariffs on steel, aluminum and copper will remain at 50%. For Vietnam, the baseline tariff rate is 20% but goes to 40% for goods deemed to be transshipments.
Canada and Mexico
President Trump raised tariffs effective August 1 on Canada to 35% for goods that don’t comply with the U.S.-Mexico-Canada (USMCA) trade agreement, with goods transshipped subject to 40%. But Trump extended Mexico’s 25% International Economic Emergency Powers Act (IEEPA) Fentanyl tariff for non-USMCA goods for another 90 days or longer with the goal of signing a deal.
Brazil and India
President Trump imposed a 40% tariff on Brazil in a July 30 Executive Order on top of the 10%. The combined 50% stems from allegations that Brazil’s Supreme Court is “politically persecuting” former President Bolsonaro. In addition, on July 15 the U.S. Trade Representative announced an investigation into Brazil’s trading practices: USTR Announces Initiation of Section 301 Investigation of Brazil’s Unfair Trading Practices For India, there’s a 25% tariff on August 1 and Trump plans an additional “penalty” for buying military equipment and oil from Russia.
China
The August 12 date ending the moratorium for higher tariffs on China could be delayed as U.S.-China negotiations continue in Stockholm, Sweden. But with no new breakthrough the current average combined rate of more than 50% tariffs still stands.
Copper Tariff
President Trump imposed a 50% tariff on copper imports effective August 1, consistent with the Sec. 232 50% tariffs already in place for steel and aluminum.
Legal Challenge to IEEPA Tariffs
A threat to President Trump’s reciprocal tariffs is the legal challenge to using IEEPA as the basis for them (V.O.S. Selections v. Trump), and on May 28 the U.S. Court of International Trade struck them down. The U.S. Court of Appeals for DC heard oral arguments on July 31 per the government’s appeal, and many of the panel’s judges expressed skepticism about using IEEPA to broadly impose tariffs.
De Minimis Shipments
On July 30, President Trump signed the Executive Order “Suspending Duty-Free de Minimis Treatment for All Countries” to suspend the de minimis tariff exemption on commercial goods for all countries effective August 29. With the de minimis exemption suspended, importers will pay the full tariff amount for shipments valued at $800 or less as explained by the White House fact sheet.
